3D PRINTING AS INNOVATIVE TECHNOLOGY TO CREATE BUSINESS OPPORTUNITY IN A SMALL ECONOMY MARKET: THE CASE OF BAHRAIN
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1 MBA Dissertation Project 3D PRINTING AS INNOVATIVE TECHNOLOGY TO CREATE BUSINESS OPPORTUNITY IN A SMALL ECONOMY MARKET: THE CASE OF BAHRAIN Supervisor: Student : Contact: Prof Mukhtar Al Hashimi Mr Mohamed Huwaidi malhashimi@ahlia.edu.bh Ext. 8563
2 Chapter Introduction The recent new hype of using 3D printing technology resulted in rapid technological development and new business opportunities. 3D printing is an old method of manufacturing materials, this sector experiencer big growth and estimated that 3D printing sector in US will be worth more than $7.5 billion by 2020 according to McKinsey (2014). In the Middle East and in small markets like Bahrain, special considerations need to be taken for the type of 3D printing application that can be implemented profitably in this new market. MakerBot 3D Printer
3 Chapter Research Problems To make a business opportunity using 3D printing technology. Issues with 3D printing business were clarified in this research to create a business plan containing following aspects: Feasibility of 3D printing in the context of Bahrain in terms of the selected product categories The Market Research of 3D printing in the context of Bahrain in terms of the selected product categories. Implementation plan for 3D printing business based on the results of the marketing and financial studies of the research.
4 Chapter Research Objectives 1. To carry out an exploratory research on the field of 3D printing business. 2. To find out the potential 3D printing product category by searching and analyzing the available 3D printing solutions. 3. To identify the business module which is suitable for 3D printing business in Bahrain. 4. To assess the feasibility of the selected product categories and business module. 5. To analyze the market potential and demand of the selected product categories by using the questionnaire tool with the use of a modified conjoint analysis technique. 6. To propose a suitable implementation plan for the selected business model.
5 Chapter Significance of the Study Research This study will be one of the first studies in the field of 3D printing business in GCC and will provide the researcher with condensed knowledge about 3D printing technologies and its application. Business Entrepreneurs and Business Students. The study will provide insights understanding of 3D printing processes and business models applicable for Bahrain market 1.8. limitation One of the limitations of this study is that the area of 3D printing was very broad and there are very limited studies on 3D printing marketing and business implementation (Mellor, 2014). Another limitation of the study is the sample size and some aspects of data collection.
6 Journey Academic articles Questionnaire tool Additive Manufacturing for Business Leaders GITEX D Print Show Interview with Business experts Testing 3D Scanning
7 Chapter 2: Literature Review Figure 2.1 Literature Review Framework
8 Chapter D Printing Profile The 3D printing or Additive Manufacturing (AM) is based on creating objects based on CAD model. It builds layer over layer in order to achieve the final shape using different materials like plastic, metal, and ceramic. ASTM include seven additive manufacturing methods which are Binder Jetting, Directed Energy Deposition, Material Extrusion, Material Jetting, Powder Bed Fusion, Sheet Lamination, Vat Photopolymerization (Thomas & Gilbert, 2014). Fig1. 3D Printing Process 1 1.Source:
9 Chapter Cases of 3D Printing Business Figure D printed castable impeller (Envisiontec, 2014) Figure 2.19 Small Prototype for marketing sample (Stratasys, 2014) Figure D printed robotic arm (Stratasys, 2014) Figure 2.21 Educational printed module (Stratasys, 2014) Figure 2.22 A 5 inch human body print (My 3D gift, 2014) Figure 2.23 Envision Tec printer and Jewelry Wax module (Envisiontec, 2014)
10 Chapter Literature Contribution 3D printing profile, capabilities and limitations Customer preferences and attitude for each product category The cost of 3D printing using deferent martials and methods The case study section provide more in depth understanding of 3D printing business applications. The literature knowledge used to build up business strategy for small business start up were highlighted in literature. 3D printed Head
11 Chapter 3: Research Method Figure 3.1 Research Methodology Framework
12 Chapter 4: Feasibility Study Figure 4.1 Feasibility Study Framework
13 Chapter D Printing Business Description and Product Identification The 3D product survey, which was conducted by the researcher on 132 web site and organization, to classify the 3D products available in the global market into categories Table 4.2. It is recommended to start from the e-commerce business module scenario (online business store), and approach to the small business center in the next business stages. Table 4.2 The Selected Product and Services Product Category Segment Product or Printer serves service required 1 Gift and Accessories B2B and B2C Product FDM Printer 2 Home Decoration B2C Product FDM Printer 3 Figurine B2C Product SLS Printer 4 Architecture Module B2B Product and Service SLS Printer 5 Jewelry Model B2B and B2C Product and Service Jet Wax Printer 6 Mobile accessories B2C Product SLA or Polyjet
14 Chapter Market Feasibility Market Needs Market Segmentation Competitors Analysis Figure 4.3 Examples of market needs Table 4.6 Business to Consumer Segmentation Figure 4.5 Strategic Group Map
15 Chapter Technical Feasibility Table 4.9 The Required Facilities For Business Tangible needs Estimated cost Estimated arrival time 1 3D paper printer MCOR (18000 BD) first year 3 6 months 300+ printing will be outsourced 1 3D Systems ProJet X60 Outsourced printing in stage one D systems Projet 1200 Outsourced printing in stage one 3D printers Makerbot and 1500 BD Utimaker scanner 3D systems brand 500 BD professional scanner (6000 BD) will be purchased at later stage Filament 120 BD Software license 100 BD 1 Office equipment (PC + printer + IPAD) 500 BD - initial costs for stage one 2720 BD Second stage costs 24,000 BD 1 month 1 month 2 month 1 month - Figure 4.5 The Paper Based Printing Process (Mcor Technologies, 2014) Figure 4.6 FDM Printing Process (ultimaker.com, 2015) Figure 4.7 SLS Technology Printing Process (3D Systems, 2015)
16 Chapter 4 Revenue in BD 4.8. Financial Feasibility The top-down approach used to estimate the business revenue forecast. According to Mars (2011) the module is based on four steps: estimation of market potential, determination of adoption rate, prediction of market share, and development of revenue scenarios. Table 4.1 Revenue Forecasts Summary 3D Printing Revenue Forecast Year 1 Year 2 Year 3 Revenue per Year Figure 4.7 3D Printing Revenue Forecasts
17 Chapter Financial Feasibility Table 4.4 operating Income Table Operating Income Year 1 Year 2 Year 3 Revenues Cost of revenues Gross profit %Gross profit 41% 48% 48% Operating expense sales and marketing General and Admin Startup Expense Y Startup Expense Y Startup Expense Y Total Operating income Figure 4.8 BEP for Gift and accessories Figure 4.9 BEP for Home decoration Table 4.15 Breakeven summary BEP Unit BEP Breakeven summary Unit / month BD 1 Gift and Accessories Home Decoration Figurine Architecture Module Jewelry Model Mobile Accessories
18 Chapter 4 Chapter Summary The Gift and Accessories, Home Decoration, Figurine, Architecture Module, Jewelry Model and Mobile accessories product category were proposed. The online store business module selected to reduce the overhead cost for the new startup. The need for both enterprise and individual customers were addressed. First mover innovative business in Bahrain market can gain benefit but will be threaded from the new entrant. The breakeven point for the selected product category varies from 3 to 70 item per month. 3D Printed Jewelry
19 Chapter 5: Market Research Figure 5.1 Market Research Framework
20 Chapter Demographic Profile Table 5.1 Demographic Profile of the Respondents (collected in mid 2015) Demographic Categories Frequency Percentage (%) Gender Male Female Age Civil Status Single Married Education Secondary Diploma Bachelors Masters A 3D Printed Family Figurine
21 Chapter Consumer Behavior Towards 3D Product Purchase Consumer s behaviors towards the different selected four products category measured. However, the actual behavior for Architectural module and Figurine was not measured because the product does not exist in the local market of Bahrain. Table 5.2 Consumer s Actual Behaviors towards the Different Selected Products Product Categories Weekly Monthly Quarterly Semi- Yearly Never % % % Annual % % % Gifts and Accessories Home Decorations Mobile Accessories Jewelry
22 Chapter Factors Affecting Consumers Purchase of the Products Figures below presents the factors perceived by the consumer-respondents that are likely to affect their decision of purchasing the six product categories specified in this research. Preferences Legend: not preferred, less preferred, moderately preferred, preferred, highly preferred. Preferences of Gifts and Accessories Approval of Friends and Family Durability of the Product Color of the Product Design of the Product Price and Affordability Mean Score Preferences of Home Decoration Approval of Friends and Family Durability of the Product Color of the Product Design of the Product Price and Affordability Mean Score
23 Chapter Factors Affecting Consumers Purchase of the Products Preferences of Mobile Accessories Technology of the Product Approval of Friends and Family Durability of the Product Color of the Product Design of the Product Price and Affordability Mean Score Preferences of Architectural Models Technology of the Product Customer Demand Durability of the Product Color of the Product Design of the Product Price and Affordability Mean Score Preferences of Figurine Size of the Product Approval of Friends and Family Durability of the Product Color of the Product Design of the Product Price and Affordability Approval of Friends and Family Material Quality Popularity Durability of the Product Color of the Product Design of the Product Price and Affordability Mean Score Preferences of Jewelry Module Mean Score
24 Chapter 5 Chapter Summary Most consumers tend to purchase the three product category in yearly bases except for Gifts and Accessories consumers purchased them in monthly bases (33%). The design of product and price and affordability are the highly Preferred factors affecting the purchasing decision of the participated consumers. Production using 3D printing provided more advantage over the traditional method for customers appreciate customization. The confirmatory interviews supported the feasibility and economy of using 3D printing in the local market of Bahrain. 3D Printed Planter
25 Chapter 6: Implementation Plan Business Strategy Figure 6.1 Framework of Implementation for 3D Printing Business in Bahrain
26 Chapter Marketing and Operations Strategy The strategy of 3D printing business will be based on introducing new 3D product in a timely manner, A. To keep business growth B. And to increase the revenues and operational and marketing learning curves. The business mission statement will be To provide state of the art 3D printed product to Bahrain customers. The vision statement will be To satisfy customer s dreams using the power of 3D printing and keep business growing.
27 Chapter Marketing and Operations Objectives The marketing plan of 3D printing business aims to establish anticipation of online business production in the community so that it can hit the ground running with retail sales immediately upon launching. Table 6.1 3D printing Business Marketing and Operational Objectives Business Objective 1 Start Business Production 2 Gift and accessories 3 Home decoration 4 Figurine 5 Architecture module 6 Jewelry model 7 Mobile accessories Q 1 Year 1 Year 2 Year 3 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4
28 Chapter 6 scan 6.3. Operational Plan Digital Design 3D Scan 3 rd party Online shop New Request New design Yes Design Customer Approval Make or Buy 3D Print Post process and Package No Start Customize Outsourced 3D Print Delivery LOCAL REG Figure 6.3 Proposed work flow diagram Sales Production Delivery
29 Chapter Conclusions 1. The 3D printing business is a feasible business in Bahrain as revealed by the feasibility study for the proposed six product category. 2. There is a demand for the 3D printed products in Bahrain market as clearly indicated in the market research and conjoint analysis. 3. 3D printing is more preferred by potential customers because of its features such as price affordability, good product design, high quality of color, approval from friends and family, durability, and other related factors.
30 Chapter Recommendations Because of the high feasibility of 3D printing business in Bahrain, it is recommended that potential entrepreneurs who are planning to engage into this venture get benefit from the implementation plan formulated in the last section of the study. The high market demand of 3D printing business in the Kingdom of Bahrain suggests that potential entrepreneurs need also to consider the threats, opportunities, strengths, and weaknesses of this proposed business by considering relevant organizational and operational plans developed in this study.
31 Chapter Future Research Future Research should use other methods of data collection such as experimental approaches and other correlational designs in order to give another perspective of empirical results in the field of 3D printing business. The present used a mixture of techniques and analyses; hence, future researches need to focus on at least a specific set of analyses and methods on a specific group of respondents.
32 ANY QUESTIONS? THANK YOU
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